Oversight Division Sunset Review: Healthcare Access Fund Tax Credit 2013

2013·0.17 MB·English

by  Missouri General Assembly, Joint Committee on Legislative Research, Oversight Division

SUNSET REVIEW
HEALTHCARE ACCESS FUND TAX
CREDIT
,......
r:n
.......
Sunset Review
HEALTHCARE ACCESS FUND TAX CREDIT
Prepared for the Committee on Legislative Research
by the Oversight Division
Mickey Wilson, CPA, Director
Review Team: Steve Shiery, CPA, Team Leader, Jeani Hancock, Kyle Bosh
TABLE OF CONTENTS
COMMITTEE ON LEGISLATIVE RESEARCH ......................... ii
LETTER OF TRANSMITTAL ....................................... iii
PURPOSE I OBJECTIVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 1
SCOPE ...................................................... page 1
METHODOLOGY ............................................ page 1
BACKGROUND .............................................. page 2
COMMENTS ................................................. page 3
Committee on Legislative Research
Oversight Subcommittee
THE COl'vfivllTTEE ON LEGISLATIVE RESEARCH
COMMIITEE ON LEGISLATIVE RESEARCH
Oversight Division, is an agency of the Missouri Gener~l
Assembly as established in Chapter 23 of the Revised
Statutes of Missouri. The programs and activities of the Representatives:
State of Missouri cost approximately $24.0 billion
Representative Tom Flanigan, Vice-Chairman
annually. Each year the General Assembly enacts laws
Representative Sue Allen
which add to, delete or change these programs. To meet
Representative Kimberly Gardner
the demands for more responsive and cost effective state
government, legislators need to receive infonnation Representative Tim Jones
Representative Chris Kelly
regarding the status of the programs which they have
Representative Tom McDonald
created and the expenditure of funds which they have
Representative Mark Parkinson
authorized. The work of the Oversight Division provides
Representative Tommie Pierson
the General Assembly with a means to evaluate state
Representative Jason Smith
agencies and state programs.
Representative Rick Stream
THE COMMITTEE ON LEGISLATIVE RESEARCH is
a permanent joint committee of the Missouri General
Assembly comprised of the chairman of the Senate Senators:
Appropriations Committee and nine other members of the
Senator Brad Lager, Chairman
Senate and the chairman of the House Budget Committee
Senator Jason Holsman
and nine other members of the House of Representatives.
Senator Joe Keaveny
The Senate members are appointed by the President Pro
Senator Paul LeVota
Tern of the Senate and the House members are appointed
by the Speaker of the House of Representatives. No more Senator Brian Munzlinger
Senator Mike Parson
than six members from the House and six members from
Senator Kurt Schaefer
the Senate may be of the same political party.
Senator Scott Sifton
Senator Ryan Silvey
Sunset reviews are assigned to the Oversight Division
Senator Wayne Wallingford
pursuant to Sections 23.250 to 23.298. After August 28,
2003, any new program authorized by the General
Assembly shall sunset not more than six years afer its
effective date unless reauthorized by the General
Assembly. The Oversight Division shall conduct a
performance evaluation of the program as set forth in
statute and prepare a written report. The report shall
make recommendations on the sunset, continuation, or
reorganization of a program.
ii
SENATORS: REPRESENTATIVES:
BRADLAGER TOM FLANIGAN,
Chair Vice Chair
JASON HOLSMAN SUE ALLEN
JOE KEAVENY KIMBERLY GARONER
PAULLEVOTA TIM JONES
BRJAN MUNZLINGER CHRIS KELLY
MIKE PARSON TOM MCDONALD
KURT SCHAEFER MARK PARKINSON
SCOTT SIFTON TOMMJE PIERSON
RYAN SILVEY JASONSMTIR
WAYNE WALLINGFORD RICK STREAM
COMMITTEE ON LEGISLATIVE RESEARCH
STATE OF MISSOURI
STATE CAPITOL
JEFFERSON CITY, MISSOURI 65101
Members of the General Assembly:
The Joint Committee on Legislative Research is required by Section 23.259.1(3), RSMo to
conduct performance evaluations of sunsetting programs to determine and evaluate program
performance in accordance with program objectives, responsibilities, and duties as set forth by
statute or regulation. The Oversight Division has reviewed the following programs:
• Surviving Spouse Tax Credit;
• Film Production Tax Credit;
• New Markets Tax Credit;
• After School Retreat Reading and Assessment Check Off;
• Missouri Teaching Fellows; and
• Healthcare Access Fund Tax Credit
The approved reports include Oversight's comments on (1) the sunset, continuation, or
reorganization of the program, and on the need for the performance of the functions of the
program; (2) the duplication of program functions; (3) the appropriation levels for each program
for which sunset or reorganization is recommended; and possibly (4 ) drafts oflegislation
necessary to carry out the committee's recommendations pursuant to (1) and (2) above.
We hope this information is helpful and can be used in a constructive manner for the betterment
of the state program to which it relates. You may obtain a copy of the reports from the Oversight
Division website at htt;p://www.moga.mo.gov/htrnlpages/losunsetreview.htrnL
OVERSIGHT DIVlSION
Sunset Review
Healthcare Access Fund Tax Credit
Chapter 1
Purpose/Objectives
The General Assembly has provided by law that the Joint Committee on Legislative Research
will conduct a performance evaluation of a program subject to the Missouri Sunset Act. The
committee is required to consider the criteria listed in Section 23 .268, RSMo in determining
whether a public need exists for the continuation of a program, or for the performance of the
functions of the program. A sunset review is the regular assessment of the continuing need for a
state program to exist. A sunset review also answers the basic questions of what has happened to
this program since its inception and does the State of Missouri continue to ''need" the services
provided by the program.
The Joint Committee on Legislative Research directed the Oversight Division to conduct a
Sunset Review of the Missouri Health Care Access Fund Tax Credit program, Section 135.575,
RSMo. This report provides a status on the Health Care Access Fund Tax Credit Program as
created by Conference Committee Substitute for House Committee Substitute for Senate
Substitute for Senate Committee Substitute for Senate Bill 577 in the 2007 legislative session
and fulfills the requirement as established by Section 23.268, RSMo.
The Oversight Division review addressed, but was not limited to the following:
1. Compiling and reviewing data related to the program since its inception.
2. Analyzing related events and changes to the program since its inception in 2007.
Scope
The Oversight Division researched the laws and activity regarding the Missouri Health Care
Access Ftmd Tax Credit Program from 2007 through 2012. The analysis included a review of
data related to the program from the Department of Revenue and the Department of Health and
Senior Services.
Methodology
The Oversight Division obtained information on the Health Care Access Fund Tax Credit
Program through a review of statutes, correspondence with the Department of Revenue (DOR)
and the Department of Health and Senior Services (DOH), and interviews with DOR and DOH
staff who work directly with the program.
1
OVERSIOHT DIVISION
Sunset Review
Healthcare Access Fund Tax Credit
Background
Conference Committee Substitute for House Committee Substitute for Senate Substitute for
Senate Committee Substitute for Senate Bill 577 (2007) created the Missouri Health Care Access
Fund Tax Credit Program (program) in Section 135.575 RSMo. The program allows taxpayers a
credit equal to 50% of their donations to the Missouri Health Care Access Fund (fund). The tax
credit amount per taxpayer is limited to $25,000, and the program has an aggregate annual tax
credit limit of one million dollars. The program also requires annual approval by the General
Assembly before any tax credits can be issued.
Donations and other fw1ds received by the fund are to be used to expand health care services in
areas designated as having limited access to health care services. Administration of the program
was assigned to the Department of Health and Senior Services and the Department of Revenue.
The provisions in Section 135.575 included an automatic sunset six years from their effective
date; the program will sunset on August 28, 2013, unless the program is reauthorized by an act of
the General Assembly. No changes have been made to the sunset language of this section of
statute after the enabling legislation was passed; therefore, the provisions are scheduled to expire
on August 28, 2013.
Department of Health and Senior Services
The mission of the Missouri Department of Health and Senior Services (DHSS) is to "Ensure
Healthy Missourians for Life by Promoting, Protecting and Partnering for Health." DHSS
operates programs to improve the health and quality of life for residents of all ages. DHSS has
the authority to designate health care facilities which are eligible for program funding, and is
required to re-evaluate those facilities every six years.
Department of Revenue
The Missouri Department of Revenue (DOR) serves as the central collection agency for the state.
DOR administers a number of tax credit programs which are claimed directly on a taxpayer's
filed return, and also redeems tax credits administered by other state agencies when they are
submitted in lieu of payments by Missouri taxpayers.
2
OVERSIGHT DIVISION
Sunset Review
Healthcare Access Fund Tax Credit
Chapter 2
Comments
The Missouri Health Care Access Fund (MHAF) was established in the State Treasury to accept
donations and other revenues so that additional funding could be made available for programs
established by the Department of Health and Senior Services (DHSS) to improve health care
services.
In order to encourage donations to the fund, the General Assembly created the Missouri Health
Care Access Fund Tax Credit program (program). The program allows taxpayers a credit equal
to 50% of their donations to the fund. The tax credit amount per taxpayer is limited to $25,000,
and the program has an aggregate annual tax credit limit (cap) of one million dollars. In addition,
the program requires approval from the General Assembly before any tax credits can be issued.
The credit may be claimed against income taxes imposed by Chapter 143 RSMo. Individuals and
businesses may claim the credit by completing the Miscellaneous Income Tax Credits Form
(MO-TC), and attaching a copy of that form and the tax credit certificate received from DHSS to
their return.
DHSS has the authority to designate eligible health care facilities in those areas with limited
access to health care services, and those eligible facilities could receive program funding
to expand health care services.
Neither DHSS nor DOR has published regulations for this program. DHSS has not created the
procedures which would be used for tax credit applications, for the review and approval of
applications, or for the issuance of tax credit certificates. In addition, DHSS has not created a
process to identify or certify eligible facilities since the program has not been funded; and
accordingly, a list of facilities eligible to receive donated funds has not been created.
The General Assembly included an estimated appropriation of one dollar from the MHAF for
this program in the DHSS budget for Fiscal Years 2009 through 2012. The General Assembly
eliminated that MHAF appropriation in the Fiscal Year 2013 DHSS budget.
Program Activity
DHSS officials told us that no inquiries have been made about donations to the fund, and no
donations have been received. The program has not provided any funding to eligible facilities
because of the lack of contributions.
Potential Statute Changes
3
OVERSIGHT DIVISION
Sunset Review
Healthcare Access Fund Tax Credit
DHSS officials stated that the following statutory changes would be helpful if the program were
to be extended:
1. Direction as to whether earmarking of donations is permissible;
2. If donated equipment is to be allowed for tax credits and if so;
3. How the monetary value of donated equipment is to be ascertained
4. How to handle tax credit issuances in the event that requests exceed the one million
dollar annual cap; and
5. How to recoup funds if a facility that received MHAF or General Revenue matching
funds closed or significantly reduced operations within a year ofreceiving such funding.
DOR officials indicated they would not seek any changes to the program were it to be extended.
Recommendation:
This program was not implemented. Since the program has not been funded, and rules and
regulations and procedures have not been adopted; it is the opinion of the Oversight Division that
the General Assembly should allow this program to sunset.
4